The damage to the plant is mostly aesthetic. These caterpillars spin a dense silk web around branches and leaves.This webbing/nest catches pieces of leaves as well as the insects' frass (fecal matter). Uglynest caterpillar gets its name from its messy feeding.

Cycle:

Larvae are yellowish green with black heads. They feed and nest in large numbers. Pupation occurs inside the messy web. Adult moths are dull orange and have a wingspan of about 1 inch. Adults emerge from midsummer to early fall, depending on weather. Females lay their eggs in masses in plant stems or trunks during this same time period. Eggs hatch and larvae overwinter.

Management:

Physically crushing the nest with the insects inside can help reduce damage. Pruning off newly developing nests in late summer and early spring is also effective. Since actual plant damage is mostly aesthetic, no insectides are usually needed. However many insecticides, both organic and synthetic, are effective if they penetrate the webbing and reach the caterpillars inside.